Brexit remarks spark new low for Sterling

Published 11 January 17

Sterling fell to its lowest level against the Euro since 10 November and hit a 31-year low against the US dollar yesterday (10 January). Gains made in the value of Sterling over the past couple of months were reversed following renewed speculation that the UK could leave the EU single market, or so-called ‘hard Brexit’, after the Prime Minister’s speech at the weekend.

A weaker currency would serve to support wholesale market prices, as Sterling-based products become more competitive. However, they also have the impact of putting upward pressure on input costs such as fuel, fertiliser and some feeds.

It remains to be seen however, whether the currency’s weakness will be short-lived or if another slide occurs as seen following the referendum in July. Further weakening of Sterling will depend on how markets react to the messages sent by Prime Minister Theresa May in parliament today as well as the outcome of the Supreme Court ruling on parliament’s place in the Brexit process.